What it is
Under Regulation Crowdfunding, a business can raise up to $5 million in 12 months from anyone, not only wealthy investors, through an SEC-registered funding portal or broker-dealer. Small businesses usually sell loans (notes at a fixed rate), revenue-share notes (a share of revenue until a set multiple is repaid) or, less often, shares.
The business files an offering statement (Form C) with the SEC, including its financial statements, and the platform lists it. Your own customers and network often bring most of the money, and the platform's investors add to it once a raise has momentum. You can gauge interest before filing (“testing the waters”), but nobody can commit money until the Form C is filed, and what you send has to be filed with it.
What it really costs per year
Two parts. First, what backers earn. Fixed-rate notes in the crowdfunded loans this site compares have a typical rate of about 11.25%, and revenue-share notes cost roughly 8–17% a year or more, depending on how fast they're repaid. Second, what the platform charges: a median of about 7.5% of the money raised (SEC staff, 2025), plus legal, accounting and other costs.
All in, a three-year note at about 12% costs about 12% a year before fees and about 18% after a 7.5% platform fee, and more once a few thousand dollars of other costs are counted. The comparison bar on this site shows about 15–17% because it counts only the rate and the platform fee on typical notes. A 1.3x revenue-share note repaid over three years with the same fee is about 24%. A revenue-share note that repays fast because sales are strong costs more per year.
Up to $124,000, the owner can certify the financial statements, with figures from the tax return; above that they need an independent accountant's review, and above $618,000 an audit (first-time raisers can use a review up to $1.235 million), which adds cost.
Work out the yearly cost of an offer you have
How fast the money comes
Usually one to four months. First you prepare the filing and the listing. Then the raise runs, and it must stay public for at least 21 days before the sale can close (investors can commit during that time). Raises with a platform's hands-on help have closed in a few weeks; the median raise in SEC data that collected money ran about three months. Testing interest with your customers first adds a few weeks but gives you an early read on whether it could fill.
Who qualifies
- U.S. businesses with a specific use for the money and customers who'd back it. Most raises that fill have an owner who brings much of the money from their own network.
- Owners comfortable with their financial statements being public, and with at least one yearly report afterward.
Where it breaks
- Many raises don't fill: in SEC data through mid-2026, under half of offerings reported raising any money (a lower bound, since reporting is incomplete). Among those that did, the median collected about 30% of the most it sought (SEC staff, data through 2024).
- Your financials become public, and you owe at least one yearly report (Form C-AR), more if you have 300 or more investors.
- Payments start on schedule whether or not the project is earning yet, unless the terms say otherwise.
- Backers lose money when businesses fail, and repaying many small investors takes work, especially if the platform closes: when one revenue-share platform shut down in 2024, its businesses had to find their own way to pay backers.
Compare with
- Presales, gift cards and store credit: yearly cost 0% at full price, money in weeks.
- SBA loans: 7(a), 504 and microloans: yearly cost about 7–13.5%, money in 1–3 months.
- 0% crowdfunded microloans (Kiva): yearly cost 0%, money in 2–3 months.